Comcast’s plan to bid £22 billion for Sky could be scuppered by a drop in its stock price according to one leading analyst.
Craig Moffett from MoffettNathanson has noted that since Comcast first made its intentions towards Sky known, its stock has fallen by 16.6 per cent.
He compared the current situation to Comcast’s 2004 bid for The Walt Disney Company, which was withdrawn after about 10 weeks when Comcast’s stock dropped as investors made clear they were not keen on the deal.
“The sell-off primarily reflects concerns about Comcast’s foray into Europe, and what appears a likely follow-on pursuit of Fox if AT&T’s acquisition of Time Warner survives the DOJ challenge,” wrote Moffett.
To move ahead with the deal, Comcast has to make a formal offer to UK regulators, but isn’t required to do so until seven days after the government approves 21st Century Fox’s current bid to acquire all of Sky. A Sky shareholder meeting would then have to follow to vote on the deal.
That could take up to two months to complete, but Moffett believes Comcast may make a final decision before then.